We've been talking about whole product bundling. Today, we will focus on how to decide whether to create a whole product bundle.
When investigating any product formation, a product marketer usually researches questions like:
- Are buyers likely to have any of the whole product components at hand?
- What affect does adding these components have on the cost of the product?
- Does the addition of these components increase or decrease the longevity of the product?
- What are the manufacturing implications of the whole product bundle?
- What are the service implications of the whole product bundle?
- What affect does adding these component do to the buyer's perceived value of the product?
- How does the product price need to change to cover the costs of these additional components?
- How does the whole product affect the financials for the product, product line, and brand?
- How do these components change the way our product is compared with the competition?
The answers to each of these questions warrants detailed investigation and analysis. However, the answers can still create conflicting trade-offs. So, how does one decide?
I suggest that the decision point be around one question.
Can you sell the whole product value to the buyer at a viable price?
At first this one question may seem simplistic. What about supply? What about demand? Not to diminish them, but to me, these are implementation issues.
The critical point is that to achieve whole product success, you must be able to persuade many buyers that your differentiation is worth the delta in price. That means two things.
- The differentiation must be important and attractive to the buyer.
- The price differentiation must be commeasurate with the perceived value.
The value-price question is fundamental for any product, whole product or not. However, it is easy to use implementation challenges as an easy excuse not to deliver a whole product. With the global resources we have available today, implementation hurdles shouldn't be show stoppers. They should be challenges that spur the creativity of the entire enterprise.